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NEW QUESTION 27
Which of the following is the MOST important use of KRIs?

• A. Providing a backward-looking view on risk events that have occurred
• B. Enabling the documentation and analysis of trends
• C. Providing an early warning signal
• D. Providing an indication of the enterprise's risk appetite and tolerance

Answer: C

Explanation:
Section: Volume A
Explanation:
Key Risk Indicators are the prime monitoring indicators of the enterprise. KRIs are highly relevant and possess a high probability of predicting or indicating important risk. KRIs help in avoiding excessively large number of risk indicators to manage and report that a large enterprise may have.
As KRIs are the indicators of risk, hence its most important function is to effectively give an early warning signal that a high risk is emerging to enable management to take proactive action before the risk actually becomes a loss.
Incorrect Answers:
A: This is one of the important functions of KRIs which can help management to improve but is not as important as giving early warning.
C: KRIs provide an indication of the enterprise's risk appetite and tolerance through metric setting, but this is not as important as giving early warning.
D: This is not as important as giving early warning.

NEW QUESTION 28
John is the project manager of the NHQ Project for his company. His project has 75 stakeholders, some of which are external to the organization. John needs to make certain that he communicates about risk in the most appropriate method for the external stakeholders. Which project management plan will be the best guide for John to communicate to the external stakeholders?

• A. Risk Response Plan
• B. Project Management Plan
• C. Risk Management Plan
• D. Communications Management Plan

Answer: D

Explanation:
Section: Volume D
Explanation
Explanation:
The Communications Management Plan will direct John on the information to be communicated, when to communicate, and how to communicate with external stakeholders.
The Communications Management Plan aims to define the communication necessities for the project and how the information will be circulated. The Communications Management Plan sets the communication structure for the project. This structure provides guidance for communication throughout the project's life and is updated as communication needs change. The Communication Managements Plan identifies and defines the roles of persons concerned with the project. It includes a matrix known as the communication matrix to map the communication requirements of the project.
Incorrect Answers:
A: The Risk Response Plan identifies how risks will be responded to.
C: The Project Management Plan is the parent of all subsidiary management plans and it is not the most accurate choice for this question D: The Risk Management Plan defines how risks will be identified, analyzed, responded to, and controlled throughout the project.

NEW QUESTION 29
Which of the following should a risk practitioner recommend FIRST when an increasing trend of risk events and subsequent losses has been identified?

• A. Implement controls to prevent future risk events.
• B. Conduct root cause analyses for risk events.
• C. Educate personnel on risk mitigation strategies.
• D. Integrate the risk event and incident management processes.

Answer: D

NEW QUESTION 30
Which of the following guidelines should be followed for effective risk management?
Each correct answer represents a complete solution. Choose three.

• A. Focus on enterprise's objective
• B. Balance the costs and benefits of managing risk
• C. Promote and support consistent performance in risk management
• D. Promote fair and open communication

Answer: A,B,D

Explanation:
Section: Volume B
Explanation:
The primary function of the enterprise is to meet its objective. Each business activity for fulfilling enterprise's objective carries both risk and opportunity, therefore objective should be considered while managing risk.
Open and fair communication should me there for effective risk management. Open, accurate, timely and transparent information on lT risk is exchanged and serves as the basis for all risk-related decisions.
Cost-benefit analysis should be done for proper weighing the total costs expected against the total benefits expected, which is the major aspect of risk management.
Incorrect Answers:
A: For effective risk management, there should be continuous improvement, not consistent. Because of the dynamic nature of risk, risk management is an iterative, perpetual and ongoing process; that's why, continuous improvement is required.

NEW QUESTION 31
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